Rite Aid benefits from customer loyalty, investment
Rite Aid reported a $123.1 million profit for fourth quarter 2013 and $118.1 million for the fiscal year — its first profitable year since 2007 — amid greater generic drug penetration and retention of at least three-quarters of the customers who switched over to the chain during the dispute between Walgreens and pharmacy benefit manager Express Scripts, among other factors.
The factors that helped fuel the nearly $62 million profit the company reported in third quarter 2013 have continued to hold, which means the 4,623-store chain has put itself on track for strong future growth, which will no doubt be helped along by the debt refinancing the company finished in February.
Wall Street certainly thinks so: Rite Aid’s stock, which in recent years had frequently hovered around $1 per share and sank to 22 cents per share on March 6, 2009, opened at $1.98 Thursday and reached a high of $2.33 Friday.
But there’s something deeper going on than just generic drugs or competitors having problems: Rite Aid’s foundations are getting stronger too. This is evident from the company’s investments in its business, such as the latest update to the Wellness store format, which will be used as the template for "virtually all" of the 400 remodels scheduled for fiscal year 2014, and the expansion of the NowClinic "virtual clinic" service to 58 stores.
Key to Rite Aid’s success has been the Wellness+ loyalty card program. During the Walgreens-ESI dispute, the chain worked hard to sign Walgreens customers who moved their prescriptions to Rite Aid up for the program, which today boasts nearly 25.2 million active members.
In addition, the company has seen good returns on its investment in the Wellness stores, whose front-end same-store sales are 3% higher than those in the non-Wellness stores; the company had already observed the stores’ comps trending higher than those of the older stores early on in the program, as well as seeing stronger performance in those Wellness stores already staffed with Wellness Ambassadors.
With Rite Aid’s executives telling Wall Street analysts Thursday that they expected to retain most of the customers gained from the Walgreens-ESI dispute, it’s clear that the company is building itself some serious customer loyalty, something that has been crucial to its triumphs and will continue to be in the future.
Signs still point to growth for retail health clinics
A new Kalorama Information report found that most patients — 91% — who had used a retail clinic were either satisfied or very satisfied with their visit.
The findings are in line with prior studies, which have long been reported by Drug Store News, and are yet further evidence that retail clinics are playing a vital role in the U.S. healthcare system.
It also is important to note that, according to the study, patients are not turning to retail-based health clinics simply to save money. Yes, the clinics are cost-effective, but it is accessibility, convenience and high-quality care that is truly winning over patients.
The news comes just one week after retail clinic operator Take Care Clinics, which is owned by Walgreens, announced that it is expanding the scope of services within its 300-plus clinics to include management for such chronic conditions as hypertension, diabetes, high cholesterol and asthma, as well as additional preventive health services.
Expect this increasing shift to chronic care services to mean an even quicker ramp up in retail clinics throughout the country.
Meanwhile, South Carolina state Department of Health and Human Services director Tony Keck recently toured a MinuteClinic location at a CVS store in downtown Columbia, S.C. The visit was especially important given that Keck helped initiate a plan to include MinuteClinic as a provider of care in order to increase access for Medicaid recipients and to make South Carolina a model in retail health; MinuteClinic accepts all South Carolina Medicaid plans.
The bottom line is that all signs continue to point to growth for retail-based health clinics. One can bet that there’s more to come.
Motley Fool: New metric to measure store productivity?
NEW YORK — There may be a new metric to track retail success or failure, according to a Motley Fool article posted Wednesday — employees per thousand square feet. The metric helps draw a correlation between service and sales productivity.
Fool author Jacob Roche observed that while Walmart has increased its total square footage by 23% between 2007 and 2012, the company only grew its workforce by 5% in that timespan. "As a result, stores are having trouble keeping shelves stocked and customers are taking their business elsewhere," he wrote.
In 2012, Walmart fielded 2.1 employees for every 1,000 square feet. Another retailer, Safeway, had 2.2 employees per 1,000 square feet. Roche compared those numbers to Whole Foods, which predicates its business on a higher level of customer service and fields 5.7 employees per 1,000 square feet.